Why Milwaukee's Mandatory Rental Inspection Program (a.k.a. "Landlord Licensing") Is Not Needed and Is A Bad Idea.

Posted by Tristan R. Pettit, Esq. in DNS, City of Milwaukee, Residential Rental Inspection (RRI) Program / Mandatory Rental I / Comments

Here are a few of the reasons why the City of Milwaukee's soon-to-be proposed ordinance requiring mandatory rental inspections  (a.k.a. "Landlord Licensing") should not be passed.

For more background information on this proposed new ordinance please read my earlier post entitled " Milwaukee To Propose Landlord Licensing and Mandatory Interior Inspections of Rental Property."  

There Are Better Ways To Spend Milwaukee’s Limited Money - The city of Milwaukee has no money and as such the city is threatening to close libraries, not hire additional police officers, not pay overtime to police officers, cut back on the number of firemen assigned to each ladder company.  Under this new ordinance the city will spend money which would be better spent on more police officers and other safety issues rather than hiring more building inspectors.

Tenant’s Right to Privacy – Under this new ordinance rental properties would be subject to search by building inspectors.  Tenants will have building inspectors walking through their apartments and looking at everything.  This is unnecessary and intrusive.  It should be the tenant’s decision to call the inspector if the landlord has failed to make a repair.  Tenants’ right to privacy in their own home is a basic American right.

Increased Cost of Rent for Tenants – The current rental property owner already pays ever-increasing real estate taxes and municipal fees. Under this proposed ordinance rental property owners will have to pay a fee to the city for being a landlord – possibly having to pay a fee per each rental unit owned.  Landlords will not be able to absorb that additional cost, especially when they are barely making ends meet in today’s tough economic times.  As a result the additional charges for this program to landlords will most likely be passed on to tenant living in those rental properties. 

Landlord Licensing Will Cause More Harm Than Good – A study conducted in 2003 by the LaFollette Institute for the City of Milwaukee, concluded that any form of landlord licensing would not work in Milwaukee.  The study indicated that any benefits would be uncertain at best and at worst would have negative effects on the housing market and the availability of affordable housing.  It said that any such program would be expensive and would cause more problems than it would solve.  To read the entire study click here.

Denying An Owner The Right To Rent Out His/Her Property Is Too Great A Power To Give a Building Inspector – Under the new program the city will have the ability to deny a rental property owner a certificate of compliance if the property does not pass muster.  Without the certificate of compliance the landlord will not be allowed to rent out his property.  This is too great of a power to give a city bureaucrat.  Even nuisance properties require that a lawsuit be filed and that a court order closure of that property before the owner is prevented from renting it out.  Under this ordinance a building code inspector would be able to close down a rental property for infractions much less severe then those that are required to close down a nuisance property. A city building inspector could use this power for improper reasons to penalize a landlord who is out of favor with City Hall.  In other cities and in Milwaukee there have been “rogue” inspectors who abuse their authority.  To read about such examples click here.  And here.  And here.

The Foreclosure Crisis Is Putting Property Owners Under Stress – With falling rents and declining property values due to foreclosures – and the financial difficulties due to unemployment etc. – the rental housing market is severely stressed.  This proposed licensing program will discourage further investment.  It will hurt rental owners, tenants, and even neighborhood home owners as rental units become “board-ups.”

Rental Property Owners Are Already Over-Regulated – With all of the regulations imposed on rental property owners you need to be a lawyer in order to sort through them all and understand them.  There are hundreds of laws and regulations imposed by the federal government (EPA, HUD) the state (Department of Commerce, Consumer Protections, Wisconsin Statutes etc,. and the various municipalities (Building Inspector, Health Department, Public Works).  More regulations of rental property owners and their rental properties are nor necessary nor are they desirable.

Please refer to www.rentalinspectionprogram.com for more information on this topic.